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I'm teaching a course on the Financial Crisis this semester. We have been examining various explanations of the "cause" of the Financial Crisis. Freakonomics has a great piece by James Altucher that sums up much of our discussion.

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I agree that the crisis was multi-caused, and so it's unhelpful to find one scapegoat. However, any explanation that leaves out all of the deregulation which preceded and enabled the mess (especially the 1999 repeal of the Glass-Steagall Act) and the Federal government's absolute refusal to regulate derivatives appears either naive or biased. Also, if one posits multi-causation, it's fair to ask questions about what were primary and secondary causes, so it's not just a complete jumble.

Posted by: Tim Iglesias | Oct 4, 2011 9:41:36 AM

I commend to your attention Mason Gaffney's book, After the Crash: Designing a Depression-Free Economy -- website at http://afterthecrash-masongaffney.com/ -- and his shorter pieces "The Great Crash of 2008" and "How to Thaw Credit Now and Forever." You might also look for Fred Foldvary's book on the crash. (Gaffney's website is http://www.masongaffey.org/